We help clients by bringing a true end-to-end lifecycle approach to a joint venture or strategic alliance. And, in many cases, the executives who lead a joint venture transaction often transfer to the new entity, leaving the parent company with no internal expertise to manage the next one. Yet, few corporate development departments have joint venture expertise, as they are less common than acquisitions. A recent EY survey shows that more than 40% of companies are contemplating joint ventures, strategic alliances or alternative deal structures. The diversity of reasons for adopting a joint venture or alliance - and the variety of assets contributed to the venture - dictate that each one requires customized legal, governance and operational design. Companies may participate in joint ventures to access scale, new markets, unique technology or to share risks. Joint ventures are used in almost all major industries, but the primary objectives of the ventures vary by industry and by company. Book an appointment with our experienced law firm today to address your concerns regarding these partnerships and effectively navigate through their risks.What EY joint ventures and alliances services can do for you Methods like mediation and arbitration can help you balance the pros and cons of joint ventures. However, most of these risks can be managed by the effective use of alternative dispute resolution techniques. An imbalance of the capital and the resources invested by the partners leading to frequent arguments and conflicts of interest.Clash in the management styles and techniques of different partners, leading to frequent conflict.Lack of clarity regarding the obligations and responsibilities of each of the partners.Some of the major risks involved with joint ventures are: Joint ventures are flexible as their term is limited.Each partner gets access to better and more diversified resources.The liability is shared equally among all the partners, making risk management easier.They provide new investment opportunities for the partners, broadening their market prospects.Some of the main benefits of joint ventures are: An experienced business lawyer can help you draft an effective JV agreement, ensuring effective collaboration.

There are several other salient points that need to be included in the agreement including the source and type of insurance used, mode of dispute resolution etc. Mode and period of payment for each partner.Share in the capital invested by each partner.Share of each partner in the supply of project staff and other collaterals.An outline for the process of decision making employed and each partner’s authority regarding the same.Degree of control that each partner has in the venture.Percentages of profits and losses shared among the partners.Some of the key matters that need to be included in a joint venture contract are: To ensure a successful collaboration, it’s crucial that joint ventures begin with clear and fair agreements. Partnerships are abiding business relationships while joint ventures tend to be goal specific and dissolve once those objectives are realised. Each partner is held equally liable for the debts incurred and shares the profits evenly.Īlthough by definition, a joint venture may seem similar to a partnership, but they differ from each other in the terms of their tenure. Each partner has a specific set of responsibilities that it needs to fulfil within the period of time stated in the agreement. A joint venture is a contractual agreement between two or more businesses that collaborate together to achieve a specific business undertaking or development. Joint ventures are a special classification of business partnerships.

Here is a broader look at the pros and cons of joint ventures: What are Joint Ventures? Sometimes these partnerships can also lead to serious conflicts of interest and harm the reputation of its partners. However, these partnerships don’t necessarily end in success stories. and the multilateral, transatlantic alliance between Lufthansa Airlines and Air Canada are all examples of innovative joint ventures. The joint venture between Cadbury Schweppes PLC and Carlyle Group to create the American Bottling Co. They allow organisations to pool their resources together and create a new space for innovation by bringing expertise from various fields together. Joint Ventures (JV) are an effective way to deliver these demands. Meeting the ever increasing demand for innovative products at affordable prices is a constant challenge for all industries.

Benefit of joint venture